- Independent research from Vanguard, Quilter, the International Longevity Centre (ILC) and Unbiased indicates that advised investors typically achieve stronger outcomes than those without advice.
- Vanguard’s Adviser Alpha study estimates that professional advice can add around 3% a year in net returns, primarily through portfolio rebalancing, tax efficiency and behavioural discipline.
- Evidence from Quilter highlights that DIY portfolios are often fragmented, undiversified, and carry risks that are not consistently rewarded, leading to poorer risk-adjusted outcomes.
- These studies highlight that the value of advice extends beyond performance, also providing structure, goal alignment and the reassurance to stay invested for the long term.
DIY investing has grown rapidly in recent years. According to a recent study from Boring Money, the number of self-directed investment accounts in the UK increased by 56% between 2020 and the end of 2023, reaching more than 10.2 million. Much of this growth has been fuelled by the appeal of low-cost options and the perception that investors can manage their portfolios without paying for advice.
For many, cost has become the deciding factor in whether to seek financial advice or go it alone. At first glance, advice fees can appear high compared with DIY platforms, leading some to question whether professional input is worth the expense.
Yet a growing body of independent research points to the opposite conclusion. Studies by Vanguard, Quilter, the International Longevity Centre (ILC) and Unbiased all show that advised investors have typically achieved stronger outcomes than those who manage their finances alone. This advantage does not come from speculative stock-picking or attempts to time the market, but from structure, discipline, behavioural coaching, and planning – the very qualities that professional advice provides.
Quantifying the Value: What the Research Shows
The International Longevity Centre (ILC) found that individuals who received financial advice were, on average, £47,000 better off after a decade compared with their non-advised peers. This wealth uplift was driven by a combination of better investment decisions, higher saving rates, and more tax-efficient planning.
Unbiased highlighted a similar advantage in pensions. Their research showed that advised savers contributed an additional £98 per month into their pensions, which compounds over time into thousands of pounds in extra retirement income. These figures provide a tangible measure of what advice can achieve in financial terms.
Vanguard’s Adviser Alpha study went further, quantifying the specific annual return benefit of good advice. Their analysis found that advisers add around 3% in net returns each year. Importantly, this value does not come from trying to beat the market. Instead, it arises from areas that investors often overlook or struggle to execute themselves: portfolio rebalancing, cost-effective fund selection, tax efficiency, and above all, preventing behavioural mistakes such as selling at the bottom of the market.
Quilter’s Adviser Delta research provided a contrasting view by examining the characteristics of unadvised investors. It found that DIY portfolios were often fragmented and undiversified, typically overweight in equities and underweight in other assets. Such portfolios carry high levels of risk but frequently fail to deliver returns that justify the risk taken. This misalignment underscores how advice can provide not just better returns, but better risk-adjusted outcomes.
How Advice Adds Value in Practice
The benefits of advice are clear, but the mechanisms are worth exploring in more detail. Using the “value of advice tree” developed within the industry, advice can be seen to add value across three dimensions: money, goals, and confidence.
Money: Professional advice supports disciplined portfolio management. This includes ongoing rebalancing to maintain risk levels, selecting cost-effective funds and platforms, identifying tax efficiencies, and ensuring diversification across regions, sectors, and asset classes. Each of these contributes incrementally to returns, and together they create a compounding advantage.
Goals: Advice connects money to life. Advisers build structured plans that align investments with client objectives, whether that is retirement income, paying for children’s education, intergenerational wealth transfer, or protection planning. By turning financial assets into a roadmap for life goals, advice transforms abstract wealth into meaningful outcomes.
Confidence: Perhaps the most underestimated aspect of advice is behavioural coaching. Left alone, investors are prone to emotional decision-making, particularly in times of market volatility. Advisers act as a stabilising force, encouraging clients to stay invested through turbulence, avoid chasing trends, and focus on long-term goals. This behavioural discipline is one of the most significant drivers of the uplift identified in Vanguard’s Adviser Alpha.
The Pitfalls of Going It Alone
The appeal of DIY investing lies in lower costs and perceived control, but evidence suggests that most self-directed investors struggle to achieve optimal outcomes. Without a structured plan, portfolios become piecemeal, often overweight in familiar assets or concentrated in a narrow set of holdings. Investors also tend to treat different pots of money differently - ISAs, pensions, and general accounts are managed in isolation rather than as part of a cohesive strategy.
Behavioural errors amplify these structural weaknesses. Fear and greed drive short-term decisions, leading to buying high and selling low. Investors often overestimate their tolerance for risk, only to retreat to cash during downturns and miss out on recoveries. Over time, these mistakes compound into significantly reduced returns. Quilter’s Adviser Delta research demonstrated how such behaviours increase risk without consistently improving outcomes.
Advice as a Wealth-Creation Tool
Taken together, these studies suggest that advice should not be seen simply as a cost, but as a tool that can support wealth creation. Just as investors accept fund management charges or platform fees as part of the investment process, advice fees should be recognised for the value they deliver. The challenge lies in transparency - clients must understand not only what they are paying, but what they are receiving in return.
This is where the conversation often shifts from generic advice to the quality of the advice provider. Not all advisers deliver the same value. The difference between average and high-quality advice can be substantial, and the responsibility lies with investors to choose carefully.
The Importance of Quality Advice
High-quality advice is characterised by consistency, depth, and accountability. It provides a transparent fee structure that aligns with fair value, a disciplined investment framework that adapts to client goals, and the ability to challenge fund managers and product providers to help clients achieve the best outcomes possible.
In contrast, poor-quality advice can dilute the very value it seeks to add, either through excessive charges, lack of oversight, or inadequate planning. Investors must therefore assess not only whether to seek advice, but where to obtain it.
Taking Advice to the Next Level
Independent research indicates that advice can support stronger outcomes. Advised investors often save more, achieve better returns, and enjoy greater financial security. But as important as advice is, the quality of that advice matters even more.
This is where MKC Wealth can make a difference. Through its quality-advice network, MKC combines structured planning, disciplined portfolio management, and behavioural coaching to help turn the theoretical “value of advice” into measurable results. By holding fund managers to account, ensuring portfolios remain aligned with goals, and guiding investors through the inevitable ups and downs of markets, MKC seeks to deliver the kind of outcomes that studies show are possible with consistent, professional oversight.
For investors, the question is no longer whether advice adds value – the evidence suggests it does. The real question is who can deliver it best. At MKC Wealth, advisers provide structured planning, disciplined portfolio management, and behavioural guidance designed to help clients achieve more consistent outcomes. By focusing on these principles, MKC Wealth aims to translate the proven benefits of professional advice into meaningful results tailored to each client’s circumstances. To find out how MKC Wealth can help add value to you, book a no obligation call today!
